Climate Financial Stability Policy Training Course

Participants can assess the quality and fitness of climate data for risk and policy purposes.

• Constructing climate risk taxonomies aligned with prudential and reporting purposes
• Scope 1, 2, and 3 emissions data quality assessment
• Geospatial hazard data matched to collateral and borrower locations
• Proxy methods for missing emissions, energy, and vulnerability data
• Data lineage, controls, and uncertainty flags for supervisory review
• Materiality thresholds documented through portfolio segmentation and exposure mapping

Participants can select and translate climate scenarios for financial risk analysis.

• NGFS scenario families, assumptions, variables, and intended analytical uses
• Translating scenario variables into sectoral revenue, cost, and valuation drivers
• Selecting orderly, disorderly, and hot-house pathways for stated objectives
• Time horizons, discount rates, and terminal values in climate analysis
• Scenario limitations, false precision, and uncertainty communication controls
• Documenting scenario selection rationale for boards, supervisors, and auditors

Participants can identify material portfolio exposures using climate risk indicators and segmentation.

• Sector heat maps using emissions intensity, policy sensitivity, and concentration
• Financed-emissions attribution using PCAF asset-class accounting methodologies and data-quality scores
• Counterparty transition plans assessed against credible decarbonisation milestones
• Loan book segmentation by geography, tenor, collateral, and obligor type
• Concentration metrics connecting carbon-intensive exposures with common risk factors
• Portfolio dashboards combining physical, transition, and data-confidence indicators

Participants can establish climate risk governance arrangements and measurable risk appetite controls.

• Board-approved climate risk appetite statements with measurable limits and triggers
• Three-lines model responsibilities for climate risk ownership and challenge
• Climate risk policies integrated into enterprise risk management taxonomies
• Management information packs linking indicators, breaches, actions, and escalation
• Internal audit testing of climate controls, evidence, and remediation
• Compensation and accountability mechanisms tied to approved climate risk metrics

Participants can incorporate climate factors into credit assessment, monitoring and risk mitigation.

• Climate due diligence embedded within borrower onboarding and annual reviews
• Cash-flow sensitivity analysis for carbon prices, energy costs, and demand
• Collateral vulnerability assessment using flood, wildfire, and heat hazard data
• Probability-of-default overlays calibrated from scenario assumptions and sector pathways
• Loan covenants, pricing, and tenors linked to transition milestones
• Watchlist triggers for missed disclosures, permits, insurance, and adaptation actions

Participants can assess climate-related market repricing and liquidity effects on financial institutions.

• Climate repricing channels across equities, corporate bonds, sovereigns, and derivatives
• Spread sensitivity estimation under carbon-cost and policy-shock assumptions
• Stranded-asset analysis for fossil fuels, utilities, transport, and real estate
• Market liquidity and fire-sale amplification during disorderly transition shocks
• Valuation adjustments for physical damage, insurance gaps, and adaptation costs
• Basis risk between carbon instruments, underlying exposures, and hedging positions

Participants can assess climate-related insurance sector risks and their financial stability implications.

• Underwriting exposure accumulation by peril, geography, line, and renewal period
• Catastrophe-model outputs interpreted for solvency, pricing, and reinsurance decisions
• Protection gaps and insurance retreat as financial stability transmission channels
• Reinsurance counterparty concentration and collateral stress under correlated events
• Climate liability claims assessed through reserving and capital adequacy lenses
• Insurer asset portfolios tested for transition and physical risk interactions

Participants can assess climate-related operational resilience risks and recovery arrangements.

• Business continuity dependencies on power, water, telecommunications, and transport
• Third-party climate exposure mapped through critical service-provider inventories
• Operational resilience tolerances applied to climate-driven disruption scenarios
• Facility adaptation measures assessed using cost-benefit and residual-risk analysis
• Cyber and climate compound events incorporated into incident response plans
• Recovery playbooks tested against prolonged heat, flood, and infrastructure failure

Participants can design and interpret a climate stress-testing approach for a financial institution.

• Climate stress-testing objectives distinguished from capital forecasting and risk identification
• Scenario narratives converted into granular shocks, transmission channels, and assumptions
• Balance-sheet projections incorporating credit losses, valuations, income, and capital
• Static versus dynamic balance-sheet assumptions selected and documented
• Reverse stress testing identifies climate conditions breaching viability thresholds
• Results challenge, sensitivity analysis, and model-risk governance procedures

Participants can analyse climate vulnerabilities and contagion channels across the financial system.

• System-wide climate vulnerability mapped across banks, insurers, funds, and households
• Network analysis identifies common exposures, contagion nodes, and feedback loops
• Sectoral carbon-price shocks traced through employment, defaults, and fiscal balances
• Sovereign climate risk assessed through revenues, expenditures, debt service, and guarantees
• Real-estate valuation declines linked to mortgages, banks, and local governments
• Financial stability dashboards combine climate indicators with conventional vulnerabilities

Participants can interpret climate-related prudential expectations and prepare review evidence.

• Basel climate-risk principles translated into supervisory expectations and review evidence
• Capital adequacy implications distinguished from risk weights and policy preferences
• Pillar 2 assessments connect climate governance, models, data, and capital planning
• ICAAP climate sections document materiality, scenarios, mitigants, and residual risks
• Supervisory review findings prioritised by severity, persistence, and systemic relevance
• Proportionality applied across institution size, complexity, and risk profile

Participants can produce climate risk disclosures supported by traceable evidence and controls.

• IFRS S1 and IFRS S2 requirements mapped to governance processes
• TCFD architecture used to structure governance, strategy, risk, and metrics
• Financed emissions measured using PCAF boundaries, attribution factors, and scores
• Transition-plan disclosures tested for targets, actions, financing, and dependencies
• Assurance-ready evidence packs connect source data, controls, calculations, and claims
• Greenwashing risk reduced through traceable claims and clear methodological boundaries

Participants can assess carbon-market mechanisms, price drivers and integrity risks.

• Compliance carbon markets compared by cap design, allocation, and compliance obligations
• EU ETS allowance pricing drivers: caps, banking, fuel switching, and policy
• Voluntary carbon markets assessed for additionality, permanence, leakage, and verification
• Carbon credit quality evaluated using ICVCM Core Carbon Principles
• Registry operations, retirement records, and double-counting controls examined
• Carbon-price assumptions incorporated into borrower forecasts and stress tests

Participants can identify Article 6 transaction risks affecting carbon credit eligibility and value.

• Paris Agreement Article 6 mechanisms distinguish ITMOs, credits, and authorisations
• Corresponding adjustments prevent double claiming between host and acquiring countries
• Authorisation, reporting, and tracking requirements affect credit eligibility and supply
• Country policy risk assessed for project pipelines and carbon-credit contracts
• Carbon market integrity risks include reversal, invalidation, and delivery failure
• Contract terms allocate registry, authorisation, and replacement-credit responsibilities

Participants can evaluate policy instruments and their potential financial stability effects.

• Carbon taxes, emissions trading, standards, and subsidies compared as transition instruments
• Policy sequencing assessed for inflation, competitiveness, distributional, and stability effects
• Macroprudential tools evaluated against climate transmission mechanisms and evidence
• Sectoral concentration limits considered where climate exposures create correlated losses
• Supervisory guidance, thematic reviews, and data requests shape institutional behaviour
• Central bank mandates, operational independence, and climate policy boundaries examined

Participants can assess transition-plan credibility and formulate risk-based engagement actions.

• Counterparty transition-plan assessment covers governance, targets, capex, and dependencies
• Credibility tests compare stated targets with capital expenditure and asset retirement
• Engagement escalation paths address missed milestones, disclosures, and covenant breaches
• Climate-adjusted lending terms align incentives without unsupported sustainability claims
• Just-transition factors incorporated into community, workforce, and political risk analysis
• Adaptation finance needs assessed through asset resilience and cash-flow protection

Participants can design decision-useful climate risk reporting for internal and supervisory audiences.

• Climate risk indicators selected for board, executive, and supervisory audiences
• Key risk indicators define thresholds, owners, frequency, and escalation routes
• Risk appetite dashboards distinguish exposure, vulnerability, control effectiveness, and outcomes
• Model documentation records assumptions, limitations, validation, and approved use cases
• Management actions tracked through owners, deadlines, dependencies, and closure evidence
• Supervisory communications present material findings without obscuring uncertainty

Participants can develop a sequenced implementation plan for climate financial stability controls.

• Gap assessment compares current practices against target regulatory and risk requirements
• Workstreams sequenced across data, governance, modelling, disclosures, and assurance
• RACI matrices assign accountable executives, control owners, reviewers, and contributors
• Milestone plans specify dependencies, resourcing, decision gates, and acceptance criteria
• Change-management communications address business-line incentives, training, and resistance
• Implementation risks logged with mitigations, triggers, owners, and contingency actions

Participants can build, review and present a complete climate financial stability assessment and implementation proposal.

• Capstone brief defines institution, portfolio, climate threat, and policy context
• Materiality assessment prioritises exposures using evidence, assumptions, and uncertainty ratings
• NGFS scenario translates into credit, market, operational, and solvency impacts
• Prudential response specifies governance, limits, supervisory evidence, and implementation milestones
• Carbon-market exposure analysis addresses pricing, credit quality, and contract risks
• Board paper presents findings, decisions, residual risks, and monitoring indicators